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Boundless faith in his destiny

Thursday, May 4, 2017
Anthony Sabga 1923 to 2017...
In this December 6th 1986 photograph, Chairman of the McEnearney/Alston Group of Companies (McAL), Conrad O'Brien,right, introduces the latest investor in McAL, Anthony N.Sabga, Chairman of the ANSA Group of Companies during a meeting of McAL shareholders. ANSA injected 30 million into McAL.

On February 5, 2004, there was a commentary in this space headlined, Blessed are our billionaires, which is appropriate to reference given the passing of Dr Anthony N Sabga on Wednesday morning.

That commentary attempted to address some of the perceptions that many in this part of world have about wealthy people and focused on the accomplishments of Anthony Sabga, Arthur Lok Jack, Aleem Mohammed and a few others.

Among the points made 13 years ago were: “We cannot accept the idea that people get rich because of a lifetime of working hard and smart, taking risks and making sacrifices....

“If you talk to any of our local billionaires, they would tell you they did not grow up wealthy. All of them would tell you they delayed buying things they or their families wanted...that they were never enthralled by brands or all-inclusive fetes.

“Without speaking to any of them, I can predict they saved a big part of their incomes and were ready (with their own capital, borrowed money and, most importantly, mentally) when the opportunity came for their breakthrough acquisitions.”

The piece went on to note that Mr Lok Jack’s breakthrough acquisition was the purchase of Charles Candy from Vernon Charles, who was migrating to Canada and that Aleem Mohammed hung up his white medical coat to transform SM Jaleel and Anthony Sabga’s opportunity came with the acquisition of McEnearney Alstons in 1986.

The column in 2004 added: “These men leveraged their acquisition to build the empires they now lead by dint of sacrifice, entrepreneurship and by reinvesting in their companies and not “eating” out the profits....

“Might I suggest that among them, our billionaires employ tens of thousands of people, pay millions in taxes, have reinvested tens of millions in their companies and ALL give back to the country in other ways.”

The story of how ANSA became ANSA McAL is most instructive. In 1986, Angostura and Associated Brands Ltd bid against each other to take over McAL (the abbreviation of Mc Enearney Alstons).

According to the book The History of the ANSA McAL group of companies: 125 years of business in the Caribbean, on August 4, 1986, Associated Brands made a bid, the total cost of which was $18.6 million, for a controlling 51 per cent stake in McEnearney Alstons, which was conservatively valued at the time at $300 million.

Among the major shareholders of Associated Brands at that time were Arthur Lok Jack, Patrick Young Sing, Alwin Poon Tip and Wilfred Espinet, according to the ANSA McAL history.

On August 11, 1986, Angostura made a takeover offer for McEnearney Alstons at $1.50 a share, compared to the $1.20 a share offered by Associated Brands.

In the middle of the takeover battle, Amalgamated Industries Ltd, the car assembly business of McEnearney Alstons, announced on September 13, 1986, that the company had ceased to carry on business with effect from September 12, 1986.

Also on September 13, according to the history of the group, Angostura filed a revised offer for McEnearney Alstons, lowering its offer from $150 to $1.25.

On October 2, 1986, the group’s car distribution business Charles McEnearney & Co Ltd notified its employees that that company was going into receivership.

After the car dealership was placed into receivership, there was serious concern about whether McEnearney Alstons would survive.

But then on November 9, 1986, ANSA made a bid to acquire a majority stake in McEnearney Alstons by offering to pay $30 million for newly offered ordinary McAL shares at $1 each, effectively paying $30 million for a majority stake in the company. As well, the investment came with an option for ANSA to invest an additional $10 million within three years.

To put in context the magnitude of Anthony Sabga’s faith in the local economy and in his ability to turnaround the fortunes of McEnearney Alstons, which had fallen on hard times, it is necessary to appreciate that 1986 was a very difficult year for T&T.

In 1986, T&T was in its fourth year of a steep economic decline, according to the Central Bank’s public education pamphlet on inflation, which was published in 2006.

In the previous three years, the country’s GDP growth rate had declined by 10.3 per cent in 1983, 5.8 per cent in 1984 and 4.1 per cent in 1985. In 1984, the economy declined by 3.3 per cent.

Central Bank Governor Alvin Hilaire, in a 2000 International Monetary Fund paper on Caribbean Approaches to Economic Stabilisation wrote: “By the time the oil boom was punctured in the early 1980s, the country had grown accustomed to a certain lifestyle and the necessary adjustments were delayed. Government and private consumption were slow to adjust.

“With a large and sticky current expenditure bill, a significant part of which was devoted to wage payments, the government initially scaled back capital spending, but fiscal deficits nonetheless emerged.

“The collapse of real estate prices spread through the economy, helping to take down a number of financial enterprises which had built their portfolios on the expectation of continued bouyancy in the real estate market and a steady growth in personal incomes...

“Serious adjustment only began around the mid-1980s with the tightening of import and exchange controls and a devaluation in 1985.”


T&T, at the time of the McAL acquisition by ANSA, was less than two months away from the political earthquake of the 33-3 general election victory of ANR Robinson’s National Alliance for Reconstruction.

Imagine what it must have taken to make an initial investment of $30 million in the McAL group, at a time when the economy was deep in a downturn and after two of the significant subsidiaries of the group had gone out of business within the previous two months.

Such an investment could only have been made by a man who had strong faith in the ability of the local economy to recover from what turned out to be seven years of economic decline—from 1983 to 1989.

But not only did he have faith in the eventual recovery of the economy, he must have had tremendous self-belief that he would have been able to make the right strategic decisions and hire the right executives necessary to effect the turnaround of McAL.

It is noteworthy that just a few years after the acquisition, what became ANSA McAL in 1987 was completely transformed into a local behemoth that today has assets of close to $14 billion, annual profits of close to $1 billion and over 6,000 employees.

What an achievement!


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